INRUSD finds buyers at key support level
Indian Rupee/US Dollar (INRUSD) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, INRUSD finished the week -0.09% lower at 0.013976 after tanking 55 pips (-0.39%) today. This is the biggest single-day loss in over a month. Closing below Thursday's low at 0.013998, the forex pair confirmed its breakout through the previous session low after trading up to 32 pips below it intraday.
Daily Candlestick Chart (INRUSD as at Feb 14, 2020):
Friday's trading range has been 82 pips (0.58%), that's far above the last trading month's daily average range of 64 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for INRUSD.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 0.013966 earlier during the day, the market bounced off the key technical support level at 0.013971 (S1). The failure to close below the support might increase that levels significance as support going forward. Prices broke below the key technical support level at 0.014019 (now R1), which is likely to act as resistance going forward. After having been unable to move above 0.014055 in the prior session, the pair ran into sellers again around the same price level today, failing to move higher than 0.014048. The last time this happened on February 6th, INRUSD lost -0.33% on the following trading day.
While the currency is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
With prices trading close to this year's low at 0.013850, downside momentum might speed up should the FX pair break out to new lows for the year. As prices are trading close to February's high at 0.014079, upside momentum could accelerate should INR/USD mark new highs for the month. As prices are trading close to February's low at 0.013930, downside momentum might speed up should INRUSD mark new lows for the month.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. Its common bullish interpretation has been confirmed for INR/USD. Out of 309 times, INRUSD closed higher 55.66% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after two trading days, showing a win rate of 57.93% with an average market move of 0.04%.